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PwC GlobalVATOnline is an online subscription service. It provides up-to-date business critical information on VAT/GST rates, rules and requirements around the world to help you maintain control, mitigate risk and improve the overall effectiveness of your VAT/GST function.

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GlobeSearch is where we provide you with access to comprehensive, business critical information on VAT/GST rates, rules and requirements in over 80 countries, across six continents: Europe (including all 28 EU member states), North America, South America, Asia, Australia and Africa. All information is regularly updated by PwC VAT/GST specialists who reside in the countries and is accompanied by extensive supporting documentation such as copies of return forms, links to useful websites (e.g. tax authority websites) and more.

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The VAT news service we offer assists you in keeping on top of important VAT/GST and customs duty developments from over 120 countries across six continents - Europe (including all EU Member States), North America, South America, Asia, Australia and Africa. This also includes commentaries on more recent proposals and current decided cases regarding global tax. Hyperlinks to applicable subjects, case law and necessary documentation is involved. You have also got the option to receive our weekly newsletter sent direct to your email inbox giving you an overview of the most recent developments and newsflashes, which inform you of breaking developments as and when they occur.

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This section contains a variety of tools and services aimed to ease the burden on Indirect Tax compliance functions. These include automation tools, reporting tools, filing tools, validation services and return and registration forms. Please use the drop down box below to see which tools and services are included in each subscription level.

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Marketplaces, online sellers, distance sellers and MOSS users - watch this space!

06 January 2020

The EU 2015 changes on B2C supply of services (telecom, broadcasting and e-services) and the introduction of the Mini One Stop Shop (MOSS) marked a major development in the area of VAT and e-commerce. The e-Commerce VAT package, adopted by the ECOFIN Council on 5 December 2017, picked up on these developments to introduce additional simplification measures for intra-EU sales of electronic services from 2019 onwards, and by 2021 will extend the Mini One-Stop Shop to a One Stop Shop to deal with distance sales of goods to EU consumers. Furthermore, new rules for electronic interfaces such as marketplaces or platforms are introduced, which deem them for VAT purposes (in certain scenarios) to be the supplier of goods sold to customers in the EU, and make them collect and pay the VAT on these sales. In December 2018, detailed implementation rules were published by the Commission in a 'Proposal for a Council Implementing Regulation' and a ‘Proposal for a Council Directive’ which were agreed at a political level at the March 2019 ECOFIN meeting. Both legal texts were formally adopted on 21 November 2019. And in a related move, the EU Council reached political agreement in November 2019 on a set of exchange of payment data rules giving Member States the right to access information collected by payment service providers, such as banks and payment institutions, with a view to assisting in the identification of online VAT fraud. These new rules are due to take effect from 1 January 2024. Overview of e-Commerce VAT Package As previously reported the e-Commerce VAT Package was adopted on 5th December 2017. The implementing legislation - Regulation (EU) 2019/2026 of 21 November 2019 and related Directive (EU) 2019/1995 - lays down detailed implementation rules on: the extension of the scope of the Mini One Stop Shop (MOSS) to all types of services as well as to intra-community distance sales of goods - subject to a €10,000 threshold for supplies of goods and TBE services – turning the MOSS into a One Stop Shop (OSS); removal of the import VAT exemption for low value consignments, with VAT on distance sales of goods not exceeding €150 from outside the EU being accounted for via an Import One Stop Shop (IOSS); and the introduction of special provisions applicable to taxable persons who facilitate certain supplies made by other taxable persons through the use of an electronic interface such as a marketplace, platform, portal or similar means, with the effect that the electronic interface may be deemed to have received and supplied the goods itself. Summary of new Implementing Regulation (EU) 2019/2026 In summary, the new rules that have now been formally adopted are as follows: art 5a defines the meaning of 'indirectly' in respect of when a supplier will be deemed to have 'indirectly intervened' in the dispatch or transport of distance sales of goods (both intra-community and import); arts 5b and 54b define when a taxable person is considered to 'facilitate' sales of goods or services made by other taxable persons through the use of an electronic interface; arts 41a and 61b introduce specific time of supply provisions for determining when a payment is accepted and therefore in which taxable period supplies by taxable persons facilitating supplies of goods through an electronic interface should be declared; arts 54c and 63c set out the type of information to be kept in the records of taxable persons facilitating supplies of goods and services through the use of an electronic interface; art 5c is added, incorporating a 'good faith' provision for electronic interfaces, under which an electronic marketplace will not be held liable for any VAT due in excess of that declared where it can demonstrate that it did not know or could not reasonably have known that the information it relied upon was incorrect; and a rebuttable presumption that every seller operating through the interface is a taxable person and that his customer is a non-taxable person; a second paragraph is added to art 57e, stipulating that the use of an identification number allocated to an intermediary to handle distance sales of goods imported from third countries is an authorisation enabling him to act as intermediary and cannot be used by him to declare VAT for taxable transactions outside the Import One Stop Shop (IOSS) regime; and an amended art 61, which will allow corrections to previous One Stop Shop (OSS) returns to be made in a subsequent return within 3 years of the date on which the initial return was required to be submitted. Summary of new Directive 2019/1995 In summary, the new rules that have now been formally adopted are as follows: art 36b - where an intermediary is deemed to have received and supplied goods sold via an electronic interface, the dispatch or transport of the goods shall be ascribed to the supply made by that intermediary; art 136a - where an intermediary is deemed to have received and supplied goods sold via an electronic marketplace, the supply of those goods to that intermediary will be exempt from VAT (zero rated); amendments to Chapter 6 Title XII (scope of the One Stop Shop scheme) to allow non-EU suppliers who make use of an electronic interface to make domestic sales of goods from stock held in the EU, and who are deemed to have received and supplied those goods themselves, to use the OSS to account for the VAT due on such supplies; and an amendment to art 369zb to align the monthly payment deadline for VAT under the IOSS with the payment deadline for import duty. Provisions relating to the extension of the scope of the One Stop Shop For the most part, these provisions are required for the proper functioning of the One Stop Shop, following the extension of its scope. However, a number of changes are proposed which go beyond the mere alignment of these provisions to the extension of the Mini One Stop Shop, such as: the use of an identification number allocated to an intermediary to account for distance sales of goods imported from third countries is an authorisation enabling him to act as intermediary and cannot be used by him to declare VAT for taxable transactions outside the Import One Stop Shop regime: on this, a second paragraph is added to art 57e of the Regulation; simplified import VAT arrangements where the IOSS is not used – declarant collects from EU customers and pays to Member State monthly; to date, if a taxable person voluntarily ceases using the Mini One Stop, it is excluded from the Mini One Stop Shop in any Member State for 2 calendar quarters. This provision is removed from art 57g of the VAT Implementing Regulation as it is not considered useful by Member States and creates additional burdens for the taxable person concerned; extension of the filing deadline for One Stop Shop returns from 20 days from period end to the end of the following month; the current system of making corrections (resubmitting the VAT return of the tax period to which the corrections relate) will be kept in place for Mini One Stop Shop VAT returns relating to the periods from the 4th quarter of 2017 to the fourth quarter of 2020: the new provisions, which allow making corrections to previous One Stop Shop returns within 3 years in a subsequent VAT return, will apply for VAT returns submitted from 1 January 2021 onwards, and art 61 is amended accordingly; the need for declaring the name of the customer has been removed; and the mandatory invoice requirement has been removed. New rules for exchange of e-commerce VAT payment data The EU Council recently agreed on a set of rules to facilitate the detection of tax fraud in respect of cross-border e-commerce transactions, giving Member States the right to access information collected by payment service providers, such as banks and payment institutions. In addition, a new central electronic system will be set up by the EU Commission for the storage of this payment information, and for the further processing of this information by national anti-fraud officials within the Eurofisc framework. These new rules are due to take effect from 1 January 2024. A summary of the various e-commerce measures is available on the European Commission’s website via this LINK. Apart from the exchange of payment data provisions which are due to take effect from 2024, the other measures set out above will apply from 1 January 2021. Businesses are provided with the possibility to register for the One Stop Shop as of 1 October 2020 to allow them to make use of it from 1 January 2021. For further information or assistance, please contact your normal PwC VAT adviser or the above-mentioned.

Special Report on EU VAT Quick Fixes 2020

06 April 2020

Under the umbrella of its 2016 Action Plan on VAT, in October 2017 the Commission published an eagerly awaited communication document, together with a series of legislative proposals for the far-reaching reform of the EU VAT system with two key aims: to make the EU VAT system more robust against fraud, and to make it simpler for businesses trading cross-border in the Single Market. The package of measures towards what the Commission calls ‘a single EU VAT area’ includes proposals for a ‘Definitive VAT Regime’ which is intended to replace the transitional arrangements entered into in 1993. In essence, the proposals seek to treat the business-to-business (B2B) Intra-EU supply of goods as a single transaction with VAT charged by the supplier in the Member State (MS) to which the goods are moved. This framework is accompanied by certain mitigation measures and simplifications along the way including the so-called ‘Quick Fixes’ which are designed to implement a range of short-term measures to reduce complexity and fraud in a number of key areas whilst the long term discussions on the Definitive VAT Regime continue. The four Quick Fixes were agreed at the end of 2018 to take effect from 1 January 2020 and include measures concerning the following areas: Simplification and harmonisation of VAT rules regarding call-off stock arrangements2. Simplification of VAT rules in order to ensure legal certainty regarding chain transactions3. Obtaining a customer’s valid VAT ID number will become a substantive requirement for zero-rating Intra-EU supplies of goods; and4. Harmonisation of presumptive rules on the proof required to zero-rate an Intra-EU supply of goods Where businesses are moving goods intra-EU, the new rules will have an impact in terms of VAT compliance processes and controls, foreign VAT registrations, VAT refunds, as well as potentially posing a number of questions around supply chain structuring and contractual terms and conditions entered into between commercial parties. Naturally, any changes will need time and careful consideration for their efficient and effective execution, thus prompt action is advisable given next year’s fast approaching deadline. It should also be noted that whilst the intention behind the Quick Fixes is to simplify, in practice the rules carry a certain amount of complexity without resolving all, or indeed many, of the VAT issues at stake. This Bulletin elaborates on the nature of the rules from an EU VAT law perspective, as well as setting out practical considerations and questions that businesses should take into account in order to determine the potential threat or strategic opportunity that the Quick Fixes present. It should be noted that the EU Commission is currently preparing Explanatory Notes (‘Notes’) to clarify certain aspects of the rules which have now been published in draft available via this LINK. However, a critical element that remains unclear in many cases is how individual MS will implement and apply the rules in practice at a national level, and whether the Commission’s Notes will help to ensure a more consistent interpretation of the rules. To date, based on the latest information we have, draft VAT laws are yet to be published in a significant number of MS, although we expect more MS to publish their draft law shortly. Nevertheless, in spite of the ongoing uncertainty across a number of areas, certain preparatory steps can be taken by businesses now in order to speed up implementation at an operational level, and indeed it is critical to start work now - by the time further clarity arrives from MS and the Commission, the lead time for businesses to effect the new changes before the end of the year will be very short. Call off stock simplification Rules Call-off stock is the term used to describe the supply of goods to a customer’s premises where legal title in the goods does not pass until the customer actually calls-off the goods as and when required. NB: This is not to be confused with consignment stock which is when the supplier holds stock in a particular territory from which to meet future (as yet unspecified) customer orders as and when required. In the absence of a simplification measure, under current EU VAT rules the movement of own goods to another MS would generally be deemed to be a transfer for VAT purposes. This would require the supplier to register in the MS of arrival in order to perform an Intra-EU despatch together with an Intra-EU acquisition, followed by a domestic supply to the customer at the time of call off. On the basis that the delayed timing of the legal title transfer potentially creates additional VAT compliance in the MS of arrival and therefore administrative cost for the supplier, many MS (but not all) already apply certain simplification arrangements that remove the need for a local VAT registration. However, these solutions are implemented at a national level and inevitably differ from one MS to the next which can make their practical use complex from an operational perspective. In order to simplify and harmonise the approach across the EU, from 1 January 2020 where the supplier already knows the identity of the customer in advance of the transfer of stock, the initial movement of goods will be ignored for VAT purposes and instead there will be a direct Intra-EU despatch by the supplier and acquisition by the customer at the time when the customer takes the goods out of the stock (thereby removing the need for a local VAT registration for the supplier), provided that: Call-off occurs within 12 months of arrival.● The supplier is not established in the MS of arrival (although the rules do not specifically preclude its registration there).● The customer is registered (although not necessarily established) in the MS of arrival and has provided their VAT ID to the supplier.● The supplier must keep a register of goods transferred and complete European Sales Lists (according to the Notes, with a nil value for the initial transfer, and with the actual value once the relevant goods are called off).● The customer must keep a register of goods received.● Customer substitution is possible if this occurs within a 12 month period and the relevant records are amended accordingly.● A supplier VAT registration is still required (ie, the simplification does not apply) if: ○ Within 12 months, the goods are not supplied to the intended customer or substitute, or not returned to the country of despatch.○ Goods are transported to another country.○ Goods are destroyed, stolen or lost (the Notes suggest that a large majority of MS agree a small tolerance would be acceptable here - where the losses amount to less than 5% of the total stock value). Practical considerations MS are obliged to implement this simplification measure - ie, it is not optional. This means that:○ Those MS that do not yet have a simplification measure in place will need to implement the new rules into their national law by 31 December 2019.○ Those MS that already have a simplification measure in place will need to adapt the current rules in line with the new provisions - for better or worse. It is not yet clear what the impact might be on MS that currently apply consignment stock relief as well. ● The supplier should be permitted to have a VAT registration in the MS where the call-off stock is located but the relief would not seem to apply where it has a fixed establishment there. ● There can be call-off stock arrangements for different customers in the same MS as long as the relevant conditions are separately fulfilled by the different parties.● Agreement is needed between supplier and customer to put in place a call-off stock arrangement.● Accurate VAT compliance and record keeping will be essential in order to apply the relief. ● The 12 month time limit applies in relation to the goods transferred and not per intended acquirer. Questions for businesses to consider: Do you, as a supplier or as a customer, currently use call-off stock or consignment stock arrangements, and if so in which MS? Do you understand how the current arrangements might be impacted from 1 January 2020? If you do not currently use call-off stock arrangements, do the new rules create an opportunity to put a call-off structure in place, and potentially deregister for VAT in certain MS?3. Do you know your customer before the goods are transferred and how do you document the arrangement?4. Do you, as a supplier, have a fixed establishment in the country of the call-off stock?5. Who is in charge for the transport - supplier or customer?6. Where is the stock held - ie, at the customer’s premises or at another location such as a third party warehouse?7. How long after arrival are the goods called-off, and how would you track this?8. Are goods sometimes destroyed, stolen or lost?9. Are goods transferred from the call-off stock to another MS (other than to the initial MS of despatch)? Please click the following links to view the three remaining quick fixes. Intra-EU chain transactions Customer’s VAT ID number as substantive requirement for zero-rating Intra-EU supplies Harmonised proof of Intra-EU supplies For a deeper discussion of how these issues might affect your business, please call your usual PwC indirect tax specialist or if you prefer to speak to one of our global indirect tax policy specialists, please contact: Tom Corbett, Dublin: +353 (1) 792 5462 tom.corbett@pwc.com

Blockchain & Indirect Tax Topics

06 April 2020

Bitcoin is everywhere. Over the past few years stories about cryptocurrencies, the millionaires they have made, and their volatility have been inescapable. Bitcoin, though, is only the thin end of the wedge. Blockchain is the technology on which Bitcoin and other cryptocurrencies operate: a massive database of transaction records – called “blocks” – linked together and time-stamped using highly secure cryptography. “Blockchain is the tech. Bitcoin is merely the first mainstream manifestation of its potential.” Marc Kenigsberg, founder of Bitcoin Chaser From an accounting perspective, blockchain is an open, distributed ledger. Instead of a traditional ledger system where each party creates and keeps their own records of a transaction, a blockchain-based system means that each party – all of whom are vetted before being granted access to the network – submits transaction data to the blockchain. This data is then verified by the other participants in the network. If that data is authenticated by a majority of network participants (often referred to as “nodes”), it is time-stamped, added to the chain, and it cannot be amended. Each subsequent transaction is added to the existing data, and so the blockchain grows. Ultimately, blockchain technology helps to create one inviolable record of what has happened within an economy, an industry, a sector, or whichever parameters the network participants decide to set. Blockchain establishes who is trading what, with whom, when, where, and for how much. Unlike local ledgers, which could be stored on far-distant and potentially incompatible operating systems, or even on paper, this blockchain-based ledger is instantly accessible by anyone who needs it and who has permission to access it. With blockchain, business can be done quicker and more securely; better and more accurate business records are created; and those records are stored and protected by the security measures inherent in blockchain technology. At PwC, we believe that blockchain will solve a number of key problems for indirect tax. “Blockchain will change a great deal of financial practice and exchange… Forty years from now, blockchain and all that followed from it will figure more prominently than will Bitcoin.” Larry Summers, former U.S. Secretary of the Treasury WHO COULD USE BLOCKCHAIN? Blockchain can be used by any type of business in any sector but moving onto blockchain-based systems will benefit some businesses more than others. In order to identify such businesses, we at PwC have a basic six-point checklist. If a business can answer “Yes” to any four of the following six questions, we believe that blockchain could dramatically improve the efficiency and security of that business: Do multiple parties share transaction data? Do multiple parties input transaction data? Is verification of transactions required immediately? Do intermediaries involved in transactions add complexity? Are transactions time-sensitive? Do multiple transactions interact? All six of these triggers can be found in the world of indirect tax, so what can blockchain do for its specific problems? EASING TRADE After decades of globalisation and increasingly free trade, the world economy is going through a protectionist period. Trade wars and the potential impact of Brexit, amongst other things, could not only drive up the price of trade, they could also complicate it. In the years ahead, customs officials across the world may need to check massive volumes of goods and companies may need to comply with increasingly complex import and export requirements, resulting in mountains of paperwork and painful delays. The cost of all this is staggering, too: IBM estimates that the cost of administration is double the cost of physically shipping a container, while according to the World Economic Forum non-tariff trade barriers suppress global trade by approximately 15%. Blockchain could help with this headache. Instead of checking crates at Shanghai or Antwerp, or poring over company records, customs authorities will have instant access to the details of transactions, proof of compliance, and copies of customs declarations, all through the blockchain. Smart contracts – pieces of code that are written into the blockchain – will automatically transfer payments of import VAT, customs duties, and other tariffs. Of course, this all depends on how many traders and how many tax authorities adopt blockchain but, if they do, approval processes will speed up, the administrative burden will be eased, and trade will flow much quicker. Several tax authorities across the world are consulting in this area, developing proof of concepts and engaging in pilot exercises. So, whenever there is talk about “easing trade” blockchain is one option to explore, to help provide an answer to some of the problems. Please click the topics below to find out more. Blockchain - Tracking Trade Blockchain – Eliminating Fraud Blockchain – Electronic Invoicing Blockchain – Compliance & The Future If you would like to know more about blockchain and how it can help resolve these and other tax challenges, please contact Tom Birch and Michael Taylor at PwC.